Skilled-Unskilled Wage Differentials, Unemployment and Hours of Work: The Case of America and Europe

Muysken, Joan and Nekkers, Geralt (2000). Skilled-Unskilled Wage Differentials, Unemployment and Hours of Work: The Case of America and Europe. UNU-MERIT Research Memoranda. UNU-MERIT.

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  • Sub-type Working paper
    Author Muysken, Joan
    Nekkers, Geralt
    Title Skilled-Unskilled Wage Differentials, Unemployment and Hours of Work: The Case of America and Europe
    Series Title UNU-MERIT Research Memoranda
    Volume/Issue No. 2
    Publication Date 2000
    Publisher UNU-MERIT
    Language eng
    Abstract In our analysis we follow Davis (1998a) and consider the consequences from trade between a flexible-wage America and a rigid-minimum-wage Europe. The minimum wage implies a certain level of unemployment in Europe, whereas factor price equalisation guarantees the same wage in America, albeit at full employment levels. We then use a process of endogenous human capital accumulation, together with a lower schooling productivity for the American unskilled workers to explain the larger skilled-unskilled wage differential in America. Moreover, we show that unskilled workers in America will work more hours than their European counterparts.
    Copyright Year 2000
    Copyright type All rights reserved
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    Created: Fri, 13 Dec 2013, 13:01:41 JST